Investor Presentaiton
B. Preliminary Group Financial Results - Underlying Basis (continued)
B.2. Balance Sheet Analysis
B.2.1 Capital Base
Total equity excluding non-controlling interests totalled €2,079 mn as at 31 December 2022 compared to €2,017 mn
as at 30 September 2022, and to €2,059 mn at 31 December 2021. Shareholders' equity totalled €1,859 mn as at 31
December 2022 compared to €1,797 mn as at 30 September 2022 and to €1,839 mn at 31 December 2021.
The Common Equity Tier 1 capital (CET1) ratio on a transitional basis stood at 15.4% as at 31 December 2022,
compared to 14.2% as at 30 September 2022 and 14.7% pro forma for Helix 3 and to 15.1% as at 31 December 2021 (and
15.8% pro forma for held for sale portfolios (referred to as 'pro forma for HFS')). During 4Q2022, CET1 ratio was positively
affected by pre-provision income and the reduction in risk weighted assets (mainly as a result of the completion of Project
Helix 3), and negatively affected by provisions and impairments as well as the payment of AT1 coupon. Throughout this
announcement, the capital ratios as at 31 December 2022 include unaudited/preliminary profits for FY2022.
The Group has elected to apply the EU transitional arrangements for regulatory capital purposes (EU Regulation
2017/2395) where the impact on the impairment amount from the initial application of IFRS 9 on the capital ratios is phased-
in gradually, with the impact being fully phased-in (100%) by 1 January 2023. The final phasing-in of the impact of the
impairment amount from the initial application of IFRS 9 is c.65 bps on the CET1 ratio on 1 January 2023. In addition, a
prudential charge in relation to the onsite inspection on the value of the Group's foreclosed assets is being deducted from
own funds since June 2021, the impact of which is 26 bps on Group's CET1 ratio as at 31 December 2022. The reduction
of the impact since 30 September 2022 is mainly the result of impairments recognised during the quarter.
The CET1 ratio on a fully loaded basis amounted to 14.7% as at 31 December 2022 compared to 13.5% as at 30
September 2022 (and 13.9% pro forma for Helix 3), and to 13.7% as at 31 December 2021 (and 14.3% pro forma for HFS).
The CET1 ratio including the final impact of IFRS 9 phasing in on 1 January 2023 and also the €50 mn dividend relating to
IFRS 17, distributed to the Bank in February 2023 is estimated at 15.2%.
The Total Capital ratio stood at 20.6% as at 31 December 2022, compared to 19.1% as at 30 September 2022 (and 19.8%
pro forma for Helix 3), and to 20.0% as at 31 December 2021 (and 20.8% pro forma for HFS).
The Group's capital ratios are above the Supervisory Review and Evaluation Process (SREP) requirements.
The Group's minimum phased-in CET1 capital ratio requirement as at 31 December 2022 was set at 10.10% comprising a
4.50% Pillar I requirement, a 1.83% Pillar II requirement, the Capital Conservation Buffer of 2.50%, the O-SII Buffer of
1.25% and the Countercyclical Buffer (CCyB) of 0.02%. The Group's minimum phased-in Total Capital ratio requirement
as at 31 December 2022 was set at 15.03% comprising an 8.00% Pillar I requirement, of which up to 1.50% can be in the
form of AT1 capital and up to 2.00% in the form of T2 capital, a 3.26% Pillar II requirement, the Capital Conservation Buffer
of 2.50%, the O-SII Buffer of 1.25% and the CCyB of 0.02%. The Pillar 2 included an add-on of 0.26% relating to the ECB's
prudential provisioning expectations as per the 2018 ECB Addendum and subsequent ECB announcements and press
release in July 2018 and August 2019. Pillar II add-on capital requirements derive from the SREP, which is a point in time
assessment, and are therefore subject to change over time. The ECB had also provided revised lower non-public guidance
for an additional Pillar II CET1 buffer (P2G) for 2022.
The Bank has been designated as an Other Systemically Important Institution (O-SII) by the Central Bank of Cyprus (CBC)
in accordance with the provisions of the Macroprudential Oversight of Institutions Law of 2015, and since November 2021
the O-SII buffer has been set to 1.50%. This buffer is being phased-in gradually, having started from 1 January 2019 at
0.50%. The O-SII buffer as at 31 December 2022 stood at 1.25% and has been fully phased-in on 1 January 2023.
Own funds held for the purposes of P2G cannot be used to meet any other capital requirements (Pillar I, Pillar II
requirements or the combined buffer requirement), and therefore cannot be used twice.
Following the annual SREP performed by the ECB in 2022 and based on the final SREP decision received in December
2022, effective from 1 January 2023, the Pillar II requirement has been revised to 3.08%, compared to the previous level
of 3.26%. The Pillar II requirement includes a revised Pillar II requirement add-on of 0.33% relating to ECB's prudential
provisioning expectations. When ignoring the Pillar II add-on relating to ECB's prudential provisioning expectations, the
Pillar 2 requirement has been reduced from 3.00% to 2.75%.
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